Heinz to tighten supplier controls in China after infant food scare

SHANGHAI/BEIJING (Reuters) - U.S. foodmaker H.J. Heinz Co
said on Tuesday it will tighten controls over ingredients
suppliers in China after it was forced to recall some infant
food products from Chinese store shelves due to excess levels of
lead.

The company, known globally for its ketchup and baked beans,
made the annoucement as it sought to contain the potential
damage to its reputation in a country where consumers are highly
sensitive to food safety after a series of high-profile scares.

Heinz told Reuters on Monday that it had recalled four
batches of its AD Calcium Hi-Protein Cereal for infants after a
food watchdog in eastern China found levels of the toxic heavy
metal above regulation standards.

Consumers in China are especially sensitive to baby products
after powdered milk tainted with the industrial chemical
melamine led to the deaths of at least six infants in 2008.

"I would think that Heinz is in a lot of trouble right now
because parents are unforgiving of any quality control problems
in baby and infant food products," said Shaun Rein,
Shanghai-based managing director of China Market Research Group.

Heinz will draft stricter systems for regulating ingredient
suppliers and improve traceability and food safety control
measures along its supply chain, the U.S. company said in a post
on its official Sina Weibo microblog on Tuesday.

Affected products had been sealed and would would be
destroyed under regulator guidance, it added.

An official at the Food and Drug Administration (FDA) in
Zhejiang province declined to give details on the levels of lead
in the Heinz cereal, but said that it would release further
information about the case in the coming days.

Standard levels for infant products should be below 0.2
milligrams per kg, according to a 2010 government report.

Heinz, which was bought out by Warren Buffett's Berkshire
Hathaway Inc and private equity firm 3G Capital last year, said
the recall was a precautionary measure.

The company added that the high lead level was caused
"accidentally" by a supplier who had provided a skimmed soybean
powder ingredient used in the batch of cereal.

"This relates to an isolated regional withdrawal in eastern
China," company spokesman Michael Mullen said in emailed
comments to Reuters. "Extensive testing confirmed that no other
Heinz baby food varieties are affected."

Heinz did not respond to phone and email requests for
further comment on Tuesday.

SOIL CONTAMINATION

The Zhejiang FDA has said the problem affected 1,472 boxes
of cereal in the province and that Heinz had told the agency it
would destroy another 153 boxes that are sealed in a warehouse
in the southern city of Guangzhou.

Heinz said in its Weibo statement that it would compensate
any consumers who had bought the affected product. The cereal is
aimed at infants aged between six months and three years,
according to the packaging.

It also apologized for inconvenience caused to consumers and
moved to assure shoppers that the firm was committed to food
quality and safety.

Foreign brands do well in China's baby food market, because
parents are willing to pay a premium to guarantee quality and
safety. The market, excluding infant milk formula, is worth
around 8 billion yuan ($1.3 billion), according to a May report
from Huidian Research.

However, food safety scares are relatively common in China
with Yum, retailer Wal-Mart and French dairy Danone SA all
taking a hit in the last year over food safety concerns.

Chinese parents are already highly sensitive to metal
contamination in food, which is often linked to the country's
high levels of soil and water pollution, one of the main ways
metals gets into cereals and other crops.

Analysts said the presence of lead - widely known by parents
to be harmful for children - would create a "scare factor" even
if no people suffered adverse effects from the products. China
has previously had issues of cadmium and lead metals in food.

Consumers took to China's Twitter-like microblog Weibo on
Tuesday, questioning whether the recall was just the beginning
of the issue, while others said they were concerned about
long-term effects on their children.

Experts say exposure to lead is particularly dangerous for
children, inhibiting intellectual and physical development. It
can cause poor concentration, disruptive behavior and even death
when subjected to high levels.

A soil survey in April showed that nearly a fifth of China's
farmland was contaminated by toxic heavy metals and chemicals,
and that more than 33,000 sq km (12,740 sq miles) - an area the
size of Belgium - were unfit for agricultural use.